The Arbors Blog

10 Financial New Year's Resolutions for Seniors

The Arbors Blog

Your parent may no longer be able to control certain aspects of their life. Luckily, they have you.

As a caregiver, you worry about their health and happiness. However, have you considered their financial health? Maybe it’s time to make that a priority in the new year.

“Save more and spend less” is always one of the top financial New Year’s resolutions. It’s probably one of yours, but when you’re considering the financial well-being of a parent, it’s more important to consider conserving their resources.

10 Financial New Year’s Resolutions for Seniors

Use a financial advisor. If your parent doesn’t already have a financial advisor, find a certified financial planner (CFP) who is willing to meet with you at least once a year to review and tweak your parent’s finances.

Prepare for the future. Have your parent write down their financial information, such as a list of financial institutions and account numbers, and keep it in a safe place. You may also want to request safety deposit, mortgage and loan information. The easiest location for this is in an encrypted file or folder on your computer. If you don’t feel comfortable encrypting the folder (or having your child do it), give the list to your attorney to keep for you. If your parent has not already created a durable or springing power of attorney (POA) to prevent unscrupulous people or officials from taking control of them and their finances, it’s a good idea to do it now.

Be careful who your parent names as primary agent for the POA. If you don’t live close to your parent, you may not be comfortable being named primary agent. After all, a POA has complete control of your parent’s finances and future. Remember, a POA does not replace a will or trust, because it ends upon the death of your parent. Discuss your questions with your parent before you make a determination.

Stay within budget. If your parent is having difficulty staying within budget, find the problem: Is she overspending or is the money “disappearing”? If she’s overspending, talk to her about the problem. If you’re not sure where the money’s going, your parent may be the victim of a scam, and you need to contact an attorney or law enforcement.

Consider an allowance. In order to stay within a budget, it may be wise to work with your parent to determine the amount she can spend freely each month and get rid of any credit cards.

Prevent scams. Limit the mail and phone calls from marketers by adding your parent’s phone number to the national Do Not Call Registry (888-382-1222 or donotcall.gov). Remind your parent not to spend money with any company with which she is unfamiliar and never to give her Social Security number or account or password information over the phone, online or by email.

Tweak your parent’s finances on a yearly basis at the minimum. Your parent’s portfolio may be exposing her to too much risk or be making too little money to meet expenses. Make sure it meets your needs. Check your parent’s credit report once a year, too, to catch identity theft early.

Sign up for direct deposit. If your parent is not already signed up for direct deposit for pension or other income, get her signed up. It’s safer and faster.

Use discounts. You’re probably familiar with senior discounts at shops and restaurants. They can save money. In addition, banks sometimes offer discounts once someone reaches a certain age. Check into and take advantage of these. After all, your parent earned them.

Check out homeowner/reverse mortgages carefully. If your parent owns their own home, homeowner/reverse/second mortgages may sound like a great deal. Just remember that these are loans and must be paid back, usually by the homeowner’s child. Scams abound in this area. Talk to your parent’s financial planner about whether this is a good move.

Who can you trust?

Are you unsure where to find the resources to meet your financial New Year’s resolutions? If your parent lives in a senior living community, ask an administrator for help. They’re trained in giving advice, and they have a vested interest in ensuring your parent’s solvency. If they don’t have the answers, they can recommend someone to help.